Medical costs are substantial and rising. But will they be the most substantial expense over your lifetime? Not likely. Will it be housing or food? Again, not likely. The answer is taxes. On average, Americans work 114 days to afford their taxes. Companies, too, have large tax burdens. They look very hard at tax issues in deciding where to build their warehouses and where to locate their administrative headquarters. 

Instructions 

a. Determine what your state income taxes are if your taxable income is $60,000 and you file as a single taxpayer in the state in which you live.

b. Assume that you own a home worth $200,000 in your community and the tax rate is 2.1%. Compute the property taxes you would pay. 

c. Assume that the total gasoline bill for your automobile is $1,200 a year (300 gallons at $4 per gallon). What are the amounts of state and federal income taxes that you pay on the $1,200? 

d. Determine what your Social Security taxes are if your income is $60,000. 

e. Determine what your federal income taxes are if your taxable income is $60,000 and you file as a single taxpayer. 

f. Determine your total taxes paid based on the above calculations (state income tax, property tax, gasoline tax, Social Security tax, and federal income tax). Determine the percentage of income that you would pay in taxes based on the following formula: Total taxes paid ÷ Total income.